Wall Street ends turbulent week sharply lower Wall Street ended a turbulent week with another astonishing show of volatility Friday, with stocks plunging, recovering and then plunging again as investors absorbed another wave of downbeat economic news. The Dow Jones industrials fell almost 340 points and the major indexes all fell sharply for the second straight week. Hedge fund selling in advance of a Saturday deadline contributed to the market's gyrations, and some retrenchment was to be expected following a big rally Thursday, when the Dow rallied more than 550 points after falling near its lows for the year. But there was plenty of discouraging news for investors to focus on, including comments from Federal Reserve Chairman Ben Bernanke that the markets remain under "severe strain" and a sobering report on October retail sales. Analysts believe the market is still searching for a bottom after last month's huge losses, and that the pattern of volatility will continue for some time — selling, even on technical reasons like looming deadlines for cashing out hedge fund holdings, is still coming against a backdrop of an extremely weak economy. "Clearly, the trading crowd like hedge funds can take this market in any direction they want to. Anybody looking to build a position is just not confident," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. The session saw another stream of bad news. Bernanke said during a speech in Frankfurt, Germany, that he would work closely with other central banks to try to alleviate the global financial crisis and left open the door to a fresh interest rate cut. The Fed is scheduled to meet Dec. 16 at its last regularly scheduled meeting this year. While Wall Street would like to see another rate cut, many investors aren't sure, given the litany of bad economic and corporate news, of how effective a rate reduction would be in the near term. Many investors are still trying to assimilate the idea that the economy's downturn will be protracted, lasting well into next year and perhaps longer. "The economic news continues to be very negative," said Ben Halliburton , chief investment officer of Tradition Capital Management. "The realization that '09 is going to be a very bad year for economic activity is starting to dawn on people and they are starting to digest how bad it's going to be." The Commerce Department reported that retail sales plunged by the largest amount on record in October as consumers cut back on spending in the wake of the financial crisis. Retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year. The market got more disappointing consumer news from retailers Abercrombie & Fitch Co. and JCPenney Co. Both warned that profits will come in below Wall Street's already lowered projections as retailers head into a holiday shopping season that could be among the slowest on record. The great fear on the Street is that Americans' reluctance to spend will extend what is already a serious economic downturn. A barrage of negative consumer news sent stocks tumbling earlier in the week. The market drew some brief comfort in the afternoon from comments from Treasury Secretary Henry Paulson , who told CNBC that capital injections in the banking sector will help stimulate lending. He also defended the decision to not buy toxic assets from banks, saying that it would not work as quickly; the move helped send stocks falling earlier this week. There was disquieting news from the tech sector that weighed on the Nasdaq composite index. Sun Microsystems Inc. said it will cut up to 6,000 workers, or about 18 percent of global staff, as part of a massive restructuring plan. And handset maker Nokia Corp. warned the global economic slowdown will weigh on sales next year. The Dow fell 337.93, or 3.82 percent, to 8,497.31, at its lows of the day. The Dow fell more than 300 in early trading, recovered to a slim advance and then turned sharply lower at the end of the day as hedge funds cashed out. Fund investors had a Nov. 15 deadline for withdrawing their money, which forced the funds in turn to sell stocks. The Standard & Poor's 500 index fell 38.00, or 4.17 percent, to 873.29, and the Nasdaq stumbled 79.85, or 5.00 percent, to 1,516.85. The Russell 2000 index of smaller companies fell 34.71, or 7.07 percent, to 456.52. Declining issues outpaced advancers by about 4 to 1 on the New York Stock Exchange, where consolidated volume came to 5.73 billion shares, compared with 7.67 billion on Thursday. For the week, the Dow lost 4.99 percent, the S&P fell 6.20 percent and the Nasdaq tumbled 7.92 percent. The major indexes have fallen dramatically since their highs of October 2007 as the housing and credit crises have taken their toll on the economy. The Dow is down 40 percent from its closing record of 14,164.53, while the S&P 500 is off 44.2 percent from its record close of 1,565.15. The Nasdaq is off 46.9 percent from its then 7 1/12-year high of 2,859.12. The Dow's surge Thursday was the third-largest single-session point gain on record, following the 889-point rise on Oct. 28 and the 936-point surge on Oct. 13. The rally came after three days of selling that wiped out about $1 trillion in shareholder value. Wall Street's violent swings in recent weeks are part of the market's ongoing "bottoming" process, analysts say, in which the market retests the lows hit last month. The market is expected to remain volatile, as evidenced by past recoveries from a bear market. Randy Frederick, director of trading and derivatives at Charles Schwab & Co., said the sell-off could be attributed in part to investors not wanting to hold on to stocks going in to the weekend, particularly ahead of a meeting of Group of 20 international leaders in Washington. The meeting could bring decisions on how to help the troubled global financial system. "Certainly in this market we've had a lot of late Friday sell-offs," he said. "The government has been very insistent on making major announcements on Sunday nights." Bernie McGinn, chief executive of McGinn Investment Management, said the market needs to have a sustained rally for a couple of days to lure buyers back into the market. For the moment, he believes the market will continue to fluctuate based on events like earnings or government reports. "We're in the middle of chaos," he said. "That's what it is, pure and simple." The volatility helped send government bond prices higher as investors looked for safety. The three-month Treasury bill's yield fell to 0.14 percent from 0.20 percent late Thursday, and the yield on the benchmark 10-year Treasury note fell to 3.72 percent from 3.85 percent late Thursday. Lower yields indicate higher demand. Meanwhile, the price of a barrel of light, sweet crude fell $1.20 to settle at $57.04 a barrel on the New York Mercantile Exchange. Oil has been falling for the same reason as stocks — the fear of a deep global recession. Shares of major retailers fell as the string of disappointing earnings and outlooks continued. JCPenney lost $2.01, or 10.4 percent, to $17.27. Abercrombie & Fitch tumbled $4.65, or 20.7 percent, to a 52-week low of $17.79. The dollar rose against other major currencies. Gold prices also rose. Overseas, Japan's Nikkei closed up 2.72 percent and Hong Kong Hang Seng rose 2.43 percent. In European trading, London's FTSE 100 was up 1.53 percent, Germany's DAX rose 1.31 percent, and France's CAC-40 added 0.98 percent. — The Dow Jones industrial average ended the week down down 446.50, or 4.99 percent, at 8,497.31. The Standard & Poor's 500 index finished down 57.70, or 6.20 percent, at 873.29. The Nasdaq composite index ended the week down 130.55, or 7.92 percent, at 1,516.85. The Russell 2000 index finished the week down 31.73, or 5.90 percent, at 505.79. The Dow Jones Wilshire 5000 Composite Index — a free-float weighted index that measures 5,000 U.S. based companies — ended at 8,721.88, down 636.42 points, or 6.80 percent, for the week. A year ago, the index was at 14,727.28.

110 banks have asked for $170B under bailout plan At least 110 banks have requested more than $170 billion from the Treasury Department's rescue fund, and many more are expected to have submitted applications before Friday's deadline. The requests would come from the $250 billion the Treasury set aside from the $700 billion fund to purchase stock in banks. Analysts at Keefe, Bruyette & Woods estimated that 62 banks have received full or preliminary approval from the Treasury for $173 billion from the Troubled Asset Relief Program. The government said Monday that American International Group Inc. also would receive $40 billion from the program. That $40 billion, however, won't come from the $250 billion set aside for the banks. Another 48 banks have applied for about $6.5 billion, according to the Keefe, Bruyette & Woods report. Several banks that have filed applications said they haven't yet decided whether to accept any funds. The tally doesn't include requests from four life insurance companies that are seeking regulatory approval to purchase savings and loans in order to become eligible for government funds. One of those companies, Hartford Financial Services Group Inc., said it would be eligible to receive between $1.1 billion and $3.4 billion if its purchase of Federal Trust Bank is approved. Generally, only banks and savings and loans are eligible for direct investment from the TARP. AIG is the only nonbank company to receive such funds so far. The total also doesn't include American Express Co., which said Monday it has restructured as a bank holding company, reportedly to seek up to $3.4 billion in funding. Publicly-held banks were required to file their applications by Friday. Private banks have been given an extended, though unspecified, deadline. Industry sources expect a flurry of last-minute applications will be filed Friday. Treasury spokeswomen on Friday wouldn't disclose how many applications have been filed or how much has been requested. Nine large banks, including Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and JPMorgan Chase & Co., received $125 billion last month. Neel Kashkari, interim director of the bailout at Treasury, told lawmakers Friday that about 20 more banks would receive funds that day. The Treasury has "approved dozens of applications from banks across the country," he said. Several banks announced Friday that they have received funds under the plan, including Huntington Bancshares Inc., Comerica Inc. and KeyCorp .

Steel production halted at Cleveland mill Steelmaking is on hold at the ArcelorMittal plant in Cleveland due to a drop in business. Both blast furnaces were idled this week, and the company plans to offer voluntary layoffs with partial pay starting next week. About 1,450 union members work at the plant. Mark Granakis, president of the United Steelworkers local in Cleveland, says there could be as many as 400 job reductions. ArcelorMittal spokeswoman Katie Patterson says updated information could come Wednesday when the company announces third quarter earnings. Jobs for those who remain at the plant will include maintenance and completing work on existing inventory. The hot strip part of the mill, where slab is turned into coil, continues to operate.

Brown expects Saudi financial help British Prime Minister Gordon Brown said Sunday he is confident that Saudi Arabia will contribute to the International Monetary Fund's bailout reserves after he promised business leaders in the Gulf that they would have a say in any future new world economic order. Brown is using a four-day tour of the Gulf to call on oil-rich Middle Eastern countries to be among the biggest donors to the IMF's coffers to rescue failing nations, which at $250 billion have already been depleted by emergency cash calls from Iceland, Hungary and the Ukraine totaling some $30 billion. "The Saudis will I think contribute so we can have a bigger fund worldwide," he said after a meeting with Saudi Arabia's King Abdullah late Saturday and business leaders early Sunday. The British leader told reporters traveling with him that he wants "hundreds of billions" of extra dollars pledged to the IMF fund, noting that the Middle East and Asia, particularly China, have significant foreign exchange reserves. But analysts have argued that Gulf states will feel little impetus to bolster the IMF fund, given its domination by the United States and the G7 industrialized nations. A senior British government source, speaking on condition of anonymity because he was not authorized to comment, said that during talks the Saudis had been concerned about becoming a "milk cow" to prop up "basket case" economies in other parts of the world. Kuwait's finance minister, Mostafa al-Shimali, told Al-Anbaa daily in comments published Sunday that Kuwait was prepared to listen to what Brown had to offer. "The matter of supporting world markets depends on investment opportunities on offer and their possible returns," he said. Brown has attempted to win favor with Arab states by stressing they have not been represented enough on international bodies and promising them a seat at the table amid discussions by world leaders "grasping toward new world order." "I believe that your country has a crucial role to play and your voice must be heard," Brown told business leaders in Saudi Arabia. After a marathon three-hour one-on-one session with Saudi Arabia's Abdullah at the Riyadh Royal Palace, Brown moved quickly on to Doha, where he is due to meet Qatari Prime Minister Hamad bin Jassim, before attending a dinner with the ruler, Emir Hamad bin Khalifa Al-Thani, later Sunday. Any funds from Gulf states are unlikely to be pledged before a meeting of G-20 nations to hammer out potential reform of the global financial system to prevent a repeat of the current crisis, scheduled for November 15 in Washington D.C., which will also be attended by King Abdullah. Business Secretary Peter Mandelson, who is traveling with Brown and a delegation of more than 20 senior British executives, indicated definite pledges were unlikely in the next few days. "They are getting each other on to the same page of analysis and the agreed response and Saudi Arabia's active participation in getting the world through this first financial crisis of the global age," Mandelson told reporters after Brown met with Abdullah. "But that is a process, not an event." While he is now attempting to woo Gulf leaders to fork out money earned from soaring oil prices, Brown has drawn ire from some oil producing states for criticizing a recent decision by OPEC to cut production by 1.5 billion barrels a day to lift prices. Crude has fallen from a high of $147 in July to under $70 currently. He repeated his calls for a "stable" crude oil price on Sunday, citing the need for "a sustainable transition to a more low carbon emissions economy for the longer-term." Britain has planned an oil summit in London in early December to follow up the talks between oil producers and consumers led by Abdullah in Jeddah in July when the oil price was at a record $147. The London gathering was initially to be held at heads of state level, but amid controversy over whom had — or had not — been invited from the oil producing states, Downing St. said it would be held at ministerial level.

Your account is being reviewed, thank you for patience. China opened the final session of the Canton Fair — the country's biggest trade show — on Sunday amid complaints that attendance has been dismal because of the financial crisis clobbering the nation's biggest export markets in the U.S. and Europe. The biannual event, which started 51 years ago in this freewheeling southern city, has long been a key barometer of global demand for Chinese goods. Foreign buyers traditionally flock to the event to haggle over an astounding array of goods — everything from wrenches, bathroom sinks and copper tubing to solar panels, laptops, motorcycles and high-heeled shoes. Final attendance figures will not be ready until the fair ends on Nov. 6. But exhibitors and buyers said they have noticed a sharp drop in attendance at the event in Guangzhou, also called Canton. "It is amazing how empty is. It's frightening," said Christopher Devereux, a British businessman who has been attending the fair for more than a decade. Devereux said the aisles are usually blocked with people. But at the fair's second five-day session late last month, attendees were able to stroll up and down corridors virtually unimpeded, said Devereux, the Guangzhou-based managing director of Chinasavvy HK Ltd., which matches foreign buyers with Chinese factories. Billed as the biggest Canton Fair ever, this season's event was held in the massive new steel-and-glass exhibition center on the banks of the Pearl River. The sprawling building with a sloping roof takes up enough space for 200 football fields and featured more than 55,600 booths, a 30 percent increase from the last show, organizers said. But when the doors opened on Oct. 15, many of the Chinese exhibitors were already gloomy. "We're looking at the financial crisis in America and Europe and we're becoming worried about the future," said Xiang Tao, as he stood in a booth surrounded by purple vacuum cleaners made by his company, Wuxi Jiejia Electric Appliances Co. Xiang said most of the firm's foreign customers are in Eastern Europe, though the company has hopes of exporting to the U.S. eventually. "But this definitely isn't the time to try to break into the American market," he said. By the end of the second session that closed Oct. 28, many exhibitors said their nightmares had come true. "I sat here all morning and didn't have one customer stop by," said a toy factory salesman who would only give his surname, Chen, because he was not authorized to talk to reporters. The salesman, whose company was based in the southern city of Shantou, sat in a booth displaying plastic toy handguns that shot tiny pellets. "I haven't had any orders so far at this fair. This is all I have," he said, reaching into a tattered shoe box and grabbing four business cards left by prospective buyers. "All I can do is go back to the factory and give them a follow-up call. It's going to be hard to survive."

Oil falls below $79 on profit-taking, demand drop Oil prices fell below $79 a barrel in choppy trading Tuesday as investors took profits from the previous day's rally and shifted their focus back to signs of dwindling world energy demand. A falling U.S. stock market, a day after a record-breaking advance, also weighed on crude prices as oil market traders continued to fixate on equities as a barometer for the overall confidence in the shaky world economy. At the pump, retail gas price kept dropping. A gallon of regular dropped 4.3 cents overnight to a new national average of $3.163, according to auto club AAA, the Oil Price Information Service and Wright Express. That's a 23 percent slide from the record average of $4.14 reached July 17. Investors generally have reacted positively to the U.S. government's plan to spend $250 billion to buy stock in banks. Nine major banks will initially participate in the extraordinary measure aimed at unclogging stalled credit markets and restoring confidence in the wider economy. That followed Monday's news that European governments were putting up over $2 trillion to safeguard their own banks. The Dow Jones industrial average fluctuated for most of the day before ending 76 points lower, a day after soaring to its biggest point gain ever and largest percentage gain since 1933. Andrew Lebow, senior vice president and broker at MF Global in New York, said "oil is still following equity markets" but noted that fears of a demand-crushing U.S. recession despite a litany of bailout measures is also prompting traders to sell crude. "On a historical basis, $80 a barrel is still very expensive," Lebow said. "The economy clearly proved that it couldn't handle prices at well above $100, so what's equilibrium price? We have no idea." Light, sweet crude for November delivery fell $2.56 to settle at $78.63 on the New York Mercantile Exchange after fluctuating between positive and negative territory for most of the day. The contract rose $3.49 to settle at $81.19 on Monday. Mike Zarembski, senior commodity analyst at brokerage OptionsXpress Inc. in Chicago, predicted oil would trade in a range of $75 to $85 a barrel in the short term as the globally coordinated financial rescue efforts eases some of the panic among investors. "We may be seeing the start of some stability. I think the market is kind of tired of all the volatility," said Zarembski. "We'll probably be in wait-and-see mode until we know how all these (bailout) scenarios play out." Oil fell to a 13-month low Friday, settling at $77.70. Crude is down 44 percent since reaching a peak of $147.17 in mid-July as the credit crisis has steadily eroded the growth outlook for world economies. To counter any further trouble in the banking sector, the U.S. plans to spend an initial $250 billion of a $700 billion bailout buying stock in private banks. But analysts say the meltdown in financial markets may have already done its damage to global economic growth. "The outlook for oil prices is still very much bearish as the risk of global recession — or at least a global slowdown — remains," said Peter Luxton, analyst at Informa in London, who expects prices to drop to the $60 to $70 a barrel region next year. He said prices may hover around the current levels until mid-November, when the OPEC meeting will be held. OPEC member countries including Iran have called for a production cut to stop the decline in oil prices, but markets are uncertain how effective that will be. "Demand is driving oil markets now," said Luxton. He noted OPEC has a poor record of boosting prices with production cuts during economic downturns. Meanwhile, other analysts are revising down forecasts. Goldman Sachs on Monday cut its year-end crude price forecast from $115 a barrel to $70, while saying prices could fall as low as $50. In other Nymex trading, heating oil futures fell 8.13 cents to settle at $2.2882 a gallon, while gasoline futures fell 3.28 cents to settle at $1.8848 a gallon. Natural gas futures fell nearly a penny to settle at $7.324 per 1,000 cubic feet. In London, November Brent crude lost $2.93 to settle at $74.53 a barrel on the ICE Futures exchange.

Bailout becomes buy-in as feds move into banking Big banks started falling in line Tuesday behind a rejiggered bailout plan that will have the government forking over as much as $250 billion in exchange for partial ownership — putting the world's bastion of capitalism and free markets squarely in the banking business. Some early signs were hopeful for the latest in a flurry of radical efforts to save the nation's financial system: Credit was a bit easier to come by. And stocks were down but not alarmingly so after Monday's stratospheric leap. The new plan, President Bush declared, is "not intended to take over the free market but to preserve it." It's all about cash and confidence and convincing banks to lend money more freely again. Those are all critical ingredients to getting financial markets to function more normally and reviving the economy. The big question: Will it work? There was a mix of hope and skepticism on that front. Unprecedented steps recently taken — including hefty interest rate reductions by the Federal Reserve and other major central banks in a coordinated assault just last week — have failed to break through the credit clog and the panicky mind-set gripping investors on Wall Street and around the globe. The Dow Jones industrials declined 77 points on Tuesday after piling up their biggest point gain ever on Monday on news of Europe's rescue plan and in anticipation of the United States' new measures. Initially the U.S. government will pour $125 billion into nine major banks with the hope that they will use the money to rebuild their reserves and to increase lending to consumers and businesses. Another $125 billion will be made available this year to other banks — if they need it — for cash infusions. In return, the government will get ownership stakes in the financial institutions. Banks, meanwhile, will have to accept limitations on executives' compensation. "Government owning a stake in any private U.S. company is objectionable to most Americans — me included," Treasury Secretary Henry Paulson said in announcing the initiative. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable." Whether the $250 billion will be sufficient to encourage banks to lend again is hard to tell, said Anil Kashyap, professor of economics and finance at the University of Chicago's Graduate School of Business. The Treasury Department arrived at the $250 billion figure after consulting with banking regulators. "This plan will work if we wind up with everybody pretty well capitalized," Kashyap said. "But if it doesn't reach that point, we'll be back in soup down the road." The government is counting on banks not to just clutch onto the cash, which aggravated the credit crisis to begin with. "The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it," Paulson said. Treasury switched gears deciding to first use a chunk of the $700 billion from the recently enacted financial bailout package to pay for taking partial ownership stakes in banks, rather than using the money to buy rotten debts from financial institutions. The government said it still intends to buy the bad mortgages and other toxic assets, another move aimed at getting credit flowing again. Besides the $250 billion this year on the stock purchases, Bush said Tuesday that an additional $100 billion would be needed in connection with covering bad assets. That would leave $350 billion of the $700 billion program, presumably to be spent by the next president. Economists as well as both Democratic and Republican lawmakers on Capitol Hill had urged Treasury to first move forward on the capital injection plan, arguing that was a more effective way to battle the financial crisis. The first bank to take advantage of the program was Bank of New York Mellon which announced it would sell $3 billion in preferred shares to the Treasury. Other banks initially participating include Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase, Bank of America Corp., including the soon-to-acquired Merrill Lynch, Citigroup Inc., Wells Fargo & Co., and State Street Corp. The government's cash infusions are attractive to banks because they are having trouble getting money from elsewhere. Skittish investors have cut them off, moving their money into safer Treasury securities. Financial institutions are hoarding whatever cash they have rather than lending it to each other or customers. Two other initiative also were unveiled to stem the credit crisis: The Federal Deposit Insurance Corp. launched an insurance fund to temporarily guarantee new issues of bank debt — fully protecting the money even if the institution fails. And, the FDIC will start providing unlimited deposit insurance for non-interest bearing accounts, which are mainly used by businesses to cover payrolls and other expenses. Frequently these accounts exceed the current $250,000 insurance limit, so the expanded insurance should discourage nervous companies from pulling their money out. Both of these efforts would be financed by fees charged to participating financial institutions — not money from the billion bailout package. Even if the new plan works, economists caution that it could take years before locked up lending returns to normal. The difference between the rate at which banks lend to other banks and the rate at which they buy U.S. government debt has narrowed, but remains near a 25-year high — a glaring sign that there's still fear in the market. But there was a hopeful glimmer elsewhere: A crucial short-term, bank-to-bank lending rate called the London Interbank Offered Rate, or Libor, inched down Tuesday. That rate is important because a lot of commercial loans and many adjustable-rate mortgages are tied to it. Some of the banks had to be pressured to participate by Paulson, who wanted healthy institutions to go first as a way of removing any stigma that might be associated with banks getting bailouts. Paulson met privately with bank executives on Monday. The government's shares will carry a 5 percent annual dividend that will increase to 9 percent after five years. That increase in the rate is aimed at providing an incentive for companies to buy the government out. The advantage to the taxpayer is that if the rescue plan works, then the shares can be sold for more than the government initially paid, providing a profit on the transaction. The move, in effect a partial nationalization of the banking system, does put the United States in the awkward position of owning shares in institutions it also regulates. The shares purchased by the government will be nonvoting. They also give the government a priority in getting paid back if a company fails. So far this year, 15 banks have failed, compared with three for all of 2007. "The government's role will be limited and temporary," Bush pledged. "These measures are not intended to take over the free market but to preserve it." At a news conference last month, Bush defended his administration's increasingly aggressive market interventions to deal with the worst financial crisis in more than a half-century. "I'm sure there are some of my friends out there saying, I thought this guy was a market guy; what happened to him? Well, my first instinct wasn't to lay out a huge government plan. My first instinct was to let the market work until I realized, upon being briefed by the experts, of how significant this problem became," Bush said then. The Federal Reserve, meanwhile, announced that it will begin buying vast amounts of short-term debt on Oct. 27 — its latest effort to break through a credit clog. The Fed is invoking Depression-era emergency powers to buy commercial paper — a crucial short-term funding that many companies rely on to pay their workers and buy supplies. Last week the Fed said it intended to take the action but didn't specify when.

Stocks pull back as profit-taking sets in Wall Street ended a relatively calm session with a moderate loss. The Dow closed down 76 points a day after its record 936-point jump. Investors, while pleased with the government's plans to spend $250 billion to buy stock in private banks, decided to cash in some of their profits from the previous day's massive advance. According to preliminary calculations, the Dow fell 76.62, or 0.82 percent, to 9,310.99. Broader stock indicators also declined. The Standard & Poor's 500 index fell 5.34, or 0.53 percent, to 998.01, and the Nasdaq composite index fell 65.24, or 3.54 percent, to 1,779.01. It was the first time in nine sessions that the Dow Jones industrial average didn't close up or down in triple digits although it did swing in a 700-point range. Big advances by many bank stocks helped offset some of the declines in the Dow and the Standard & Poor's 500 index, giving them a better showing for the day than the Nasdaq composite index, which fell more than 3 percent. But the Nasdaq, dominated by technology stocks, also lagged ahead of a profit report from Intel Corp. Profit-taking started creeping into the market after the Dow surged more than 400 points at the opening. Wall Street is expected to see jittery trading in the weeks and perhaps months ahead because of worries about the economy; stocks also tend to ratchet up and down when they're recovering from a plunge like the one Wall Street has suffered in the past two weeks. "We don't know if the bottom is in," said Lincoln Anderson, chief investment officer and chief economist at LPL Financial in Boston, referring to the market's advance Monday after huge losses last week. "We certainly expect heightened volatility for a fair amount of time while we sort out just exactly what's going on." Investors had snapped up stocks Monday in anticipation of the government's plan. President Bush said Tuesday the government will use a portion of the $700 billion financial bailout passed at the start of the month to inject capital into the nation's major banks, which have been slammed by souring mortgage investments. The move follows a similar one announced Monday by European governments to invest about $2 trillion in their own troubled banks. Investors are hoping extraordinary steps by government officials will help resuscitate stagnant credit markets. "The tone is cautious," Anderson said. "I don't think anybody is pile driving into the market and doubling up." The revised bailout plan differs from the original in that it aims to recapitalize banks, not just buy the troubled assets off their books at prices that could leave the banks with losses. "This begins to penetrate the core of the problem," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. But, he said, "there will be a point in time where the euphoria of the bailout plan begins to wear off and the market begins to face reality. And that reality is likely to be a sour earnings season, and that the economy is in recession." Though the major indexes showed losses, advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where volume came to 1.88 billion shares. Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said investors pleased about the government's bank plan gravitated toward industrial companies, seeing them as more likely to benefit from a revived credit market than technology companies. That helped send the Nasdaq lower. "People are thinking more of the blue chips are going to respond," he said. Light, sweet crude fell $2.56 to settle at $78.63 per barrel on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices declined. The Dow remains 34.3 percent below its Oct. 9, 2007 record close of 14,164.53, and could fluctuate around these levels as investors await signs of stabilization in the housing and job markets. Cardillo said he believes the worst lows are behind the stock market, but other analysts have shied away from saying Wall Street had reached a bottom. The Dow has not yet fallen below its low during the last bear market, the closing level of 7,286.27 on Oct. 9, 2002. Investors have been trying to regain their footing after a gruesome week that obliterated about $2.4 trillion in shareholder wealth. The Dow came off an eight-day losing streak that amassed point losses of just under 2,400, or 22.1 percent, bringing the blue-chip index to its lowest level since April 2003. That 18.2 percent weekly plunge in the Dow was the worst in the index's 112-year history. Following the Columbus Day holiday, the U.S. government bond markets reopened Tuesday and indicated that investors' desire for safe assets remains strong though overall demand appeared to ease. The three-month Treasury bill's yield rose to 0.27 percent from 0.21 percent late Friday, and the 10-year note's yield rose to 4.07 percent from 3.86 percent. Banks appear to be growing somewhat more willing to lend to one another. The London interbank offered rate, or Libor, for three-month dollar loans fell to 4.64 percent from 4.75 percent. Libor is important because many consumer loans, including about half of all adjustable-rate mortgages, are tied to it. The recent sell-off in stocks arrived amid a seize-up in lending, as banks and investors around the world grew fearful about the creditworthiness of other institutions following the September bankruptcy of investment bank Lehman Brothers Holdings Inc. and the subsequent failure of thrift bank Washington Mutual Inc. Tight lending conditions make it harder and more expensive for businesses and consumers to get a loan, a headwind for economic growth. Robert Dye, senior economist at PNC Financial Services Group, said the government's actions likely will help revive the credit markets, where many businesses turn to fund day-to-day operations, but that investors' focus in the past month about the soundness of the financial system had left little time to address other concerns about trouble in the economy. "These steps are not going to turn the real economy on a dime," he said of the government intervention. "The two keys to the fundamental economy right now are the job market and the housing market and both of those remain distressed." "There isn't one bottom here. We're talking about multiple events. There will be a bottom in financial market and another in the labor market and one in the housing market. And they're not going to all line up," Dye said. Many of the nine banks the government identified as ones in which it will invest advanced Tuesday. Among them, Citigroup Inc. rose $2.87, or 18 percent, to $18.62, while Bank of America Corp. rose $3.74, or 16 percent, to $26.53. JP Morgan Chase & Co. fell $1.28, or 3.1 percent, to $40.71. Intel Corp. fell $1.06, or 6.2 percent, to $15.93 ahead of its quarterly earnings report, which arrived after the closing bell on Wall Street. The chip maker's earnings topped Wall Street's forecast though the company warned the financial crisis is making it difficult to project results and that its fourth-quarter sales could fall short of Wall Street estimates. The Russell 2000 index of smaller companies fell 16.24, or 2.84 percent, to 554.65. Asian and European markets shot higher. Hong Kong's Hang Seng index rose 3.19 percent, after a more than 10 percent increase on Monday. Japan's Nikkei index, catching up from the country's market holiday Monday, jumped 14.15 percent — the largest increase ever. In Europe, Britain's FTSE 100 jumped 3.23 percent, Germany's DAX index rose 2.70 percent, and France's CAC-40 rose 2.75 percent.

Oil rises as investors eye US financial turmoil Concerns over deepening turmoil in the U.S. financial system sent oil prices higher Thursday as investors turned away from equities in favor of commodities. Unrest in oil-rich Nigeria also supported prices. Oil had jumped Wednesday as investors fled equities to crude as a short-term safe haven amid global market unrest. After opening lower Thursday, light, sweet crude for October delivery on the New York Mercantile Exchange was up $2.18 to $99.34 a barrel in electronic trading by midday in Europe. On Wednesday, the contract rose $6.01 to settle at $97.16, after dropping $10.03 the previous two trading sessions. "Oil is not viewed as safe a haven as gold, but investors consider it safer than equities," said Victor Shum, an energy analyst with consultancy Gertz & Purvin in Singapore. "If these financial troubles lead to a world recession however, that's going to affect demand big-time." The Federal Reserve earlier on Wednesday had sought to calm investor fears by rescuing troubled insurer American International Group Inc. with an $85 billion bailout loan. The emergency measure came a day after Lehman Brothers Holdings Inc., a 158-year-old investment bank, filed for bankruptcy after failing to find a buyer. Stepped-up attacks by Nigerian militants against the country's oil infrastructure helped to support oil prices. In a fifth day of violence, Nigeria's main militant group said Wednesday that it had destroyed an oil-pumping station and a pipeline crossing southern Nigeria in a rare daylight attack. A spokesman for Nigeria's state oil company said Wednesday that militant attacks are now cutting the country's daily oil production by about 1 million barrels a day, 40 percent of what the country produced before the militant campaign began three years ago. "In the last few days, militant attacks in Nigeria have been stirring up again, but that's on the back burner right now," Shum said. "I see downward pressure on oil in the near-term, with the key support level at US$90." Commenting on the nervousness in the market, Vienna's JBC Energy noted that "the increase in oil prices ... could be a sign that investors can no longer trust each other and investments are being made in commodities that appear safe." The U.S. government reported Wednesday a bigger-than-expected drop in crude supplies, reflecting the shutdown of virtually all Gulf Coast oil production because of Hurricane Ike and Hurricane Gustav. The Energy Information Administration said U.S. crude stocks fell by 6.3 million barrels for the week ending Sept. 12, much bigger than the 3.7 million barrel drop expected by analysts surveyed by energy research firm Platts. In other Nymex trading, heating oil futures fell more than a cent to $2.81 a gallon, while gasoline prices dropped by 2 pennies to $2.4430 a gallon. Natural gas for October delivery rose by more than 26 cents to $8.174 per 1,000 cubic feet. In London, October Brent crude gained 92 cents to $95.76 a barrel on the ICE Futures exchange.

Pending home sales fall 3.2 percent Pending U.S. home sales fell more than expected in July as the housing market's struggles continued, an industry group said Tuesday. The National Association of Realtors said its seasonally adjusted index of pending sales for existing homes fell 3.2 percent to a reading of 86.5 from an upwardly revised June reading of 89.4. The index was 6.8 percent below year-ago levels. Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one- to two-month lag before a sale is completed. Wall Street economists surveyed by Thomson/IFR had predicted the index would fall to 88.6. The index, which sunk to a record low of 83 in March, stood at 92.2 in July 2007. Lawrence Yun, the trade group's chief economist, forecasts U.S. home sales are on a pace to fall 11 percent from last year to just over 5 million in 2008. Yun also says that stringent lending criteria by Fannie Mae and Freddie Mac — the mortgage finance companies taken over by the government this weekend held back sales activity. Many in the real estate industry are hopeful that these standards will be relaxed with Fannie and Freddie under government control, but the outlook remains uncertain.

OPEC chief says output likely to remain unchanged OPEC's president says oil ministers will likely decide to maintain crude output at present levels. OPEC President Chakib Khelil's statement reflects the feeling among the majority of members that the 13-nation producing group should not cut back production despite concern about rapidly falling prices. A formal decision by OPEC is expected to be announced following consultations that will begin later Tuesday. OPEC is holding its meeting in Vienna, Austria. Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Oil down as Ike shifts course, OPEC mulls output Oil prices slipped below $104 a barrel Tuesday for the first time since early April as traders bet that Hurricane Ike would miss critical Gulf Coast oil installations and in Vienna, Saudi Arabia's oil minister signaled OPEC won't cut production. Light, sweet crude for October delivery fell $2.44 to $103.90 in midday trading on the New York Mercantile Exchange, the lowest level since April 3. Prices rose 11 cents to settle at $106.34 in volatile trading Monday. Crude's decline puts the contract within striking distance of the psychologically important $100 threshold, a level first reached on Feb. 19. Ike roared ashore south of the Cuban capital of Havana early Tuesday after shifting course overnight on a track that could hit anywhere from northern Mexico to Corpus Christi, Texas — well south of major oil and natural gas installations in the Gulf of Mexico. The storm also weakened Monday from a Category 3 storm to a Category 1. "All of the signals are that this hurricane will be a miss as far as infrastructure goes, so that should keep us moving toward $100 a barrel," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. Still, forecasters warned that a low-pressure system could nudge the storm to the north, limiting the downward pressure on oil prices. "There's still the possibility that Ike could be a real devil and if nothing else cause additional precautionary evacuations and shutdowns" of Gulf platforms and rigs, said Peter Beutel, energy analyst at Cameron Hanover, New Canaan, Conn. Oil market traders were also keeping a close watch on an OPEC meeting in Vienna, Austria. Oil ministers from the Organization of Petroleum Exporting Countries meet Tuesday to decide whether to hold production levels steady despite crude's steep decline in recent months. Prices have plunged about 30 percent since surging to a record $147.27 a barrel on July 11. Iran and other hawkish members have been pushing the 13-member body to trim output in an effort to lift prices — or at least halt the decline. But Saudi Arabia, the cartel's largest member, and a number of other countries have been less vocal about possible cutbacks. Early morning comments by Saudi Oil Minister Ali Naimi suggested the kingdom, which accounts for about a third of all OPEC output, prefers not to tighten the spigots for now. "The market is fairly well balanced," Naimi told reporters after arriving in Vienna in the dawn hours of Tuesday. "I think things are in balance, in a healthy position." Kuwait's oil minister, Mohammed Abdullah Al-Aleem, also said there is no need for OPEC to cut production. Oil analyst and trader Stephen Schork, speaking by phone from Vienna, said he expects ministers will keep production constant for now. Part of the reason, he said, would be to avoid sparking a politically motivated firestorm in the U.S., by far the world's largest oil consumer. U.S. gasoline prices have come down from their summer highs above $4 a gallon, but still remain nearly a dollar higher than they were a year ago. "I don't think the Saudis or OPEC in general want to project themselves into the U.S. presidential election, which is what would happen if you saw a production cutback," he said. In other Nymex trading, heating oil futures fell 7.86 cents to $2.935 a gallon, while gasoline prices dropped 9.10 cents to $2.6593 a gallon. Natural gas for October delivery tumbled 25.5 cents to $7.27 per 1,000 cubic feet. In London, October Brent crude fell $2.11 to $101.33 a barrel on the ICE Futures exchange.

Boeing Extends Pact Despite Strike Vote A last-minute move to avert a potentially bruising strike that could cost more than 27,000 workers weeks of pay would usually be met with unalloyed relief. Not with the Machinists union faithful Wednesday night after Boeing Co. aircraft assembly workers voted overwhelmingly to strike for an unprecedented second time in three years, then learned both sides had agreed to a 48-hour contract extension at the request of Washington Gov. Chris Gregoire and federal mediators. Chief negotiator Mark Blondin and Tom Wroblewski, president of Machinists District Lodge 751, were repeatedly shouted down at the union hall with catcalls of "Sellout!" and "What was the strike vote for?" For Boeing, the rejected offer took "the best contact in the industry and we made it better," Vice President of Human Resources Doug Kight said in a news conference. He repeatedly turned aside questions of whether Boeing was relieved to get another chance to avert a strike by offering a sweeter deal. "Responding to a request from the federal mediators is appropriate for both sides," Kight said. "My job at this point is to listen to the union." Jim Proulx, a Boeing spokesman, said company and union negotiators would meet together with a federal mediator at an undisclosed time and location Thursday. Boeing's "best and final offer," presented last Thursday after talks that began May 8, included bonuses totaling at least $5,000 and averaging $6,400, raises averaging 11 percent, pension increases and a 3 percent cost-of-living adjustment — $34,000 in average pay and benefit gains per employee, according to the company. The International Association of Machinists and Aerospace Workers represents about 25,000 workers in District 751 in the Seattle area, 1,500 in District 24 in Gresham, Ore., a Portland suburb, and about 750 who do military work for Boeing in Wichita, Kan. Analysts say a strike could cost Boeing about $100 million per day in deferred revenue. During the last strike, one of the shortest in company history, Boeing was unable to deliver more than two dozen airplanes on schedule. In a vote that hinged largely on approximately 7,000 union members who were hired since the Machinists' last strike against Boeing — a 24-day walkout in 2005 — 80 percent voted no on the offer and a whopping 87 percent elected to go on strike if the offer was rejected, far more than the two-thirds required for a walkout. With anything less than two-thirds for a strike, under union rules, the offer would have taken effect by default regardless of the vote to reject it. The extension pushed back the deadline for a walkout from 12:01 a.m. Thursday to the same time Saturday. With the Machinists' membership split between the post-'05 hires and seasoned veterans of a dozen years or more and few in between, union leaders accused Boeing of conducting a media blitz focusing on recent hires as the most likely prospects to vote against a strike. "They've got 48 hours to bring a deal acceptable to you," Blondin told more than 100 shop stewards and others who had been chanting "Strike, strike, strike!" Struggling to make himself heard, a task the older Wroblewski found nearly impossible, Blondin insisted that it was worth one more try to reach agreement at the bargaining table without a strike. "We have told you all along that our job as negotiators is to negotiate a contract that is acceptable to you, not to negotiate a strike," Blondin said. Confronted on his way out of the room by Randy Carroll, a mechanic in Auburn, he said union negotiators would not accept continued extensions. "If we can't do it in 48 hours, brother, it's on," Blondin said.

Lloyd's of London push into emerging markets Oil prices closed at their lowest level in five months Thursday as a lower-than-expected drop in U.S. gasoline supplies gave traders more reason to believe that a cooling economy is forcing Americans to drive less. Light, sweet crude for October delivery fell $1.46 to settle at $107.89 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month contract since April 4. Crude prices have fallen for five straight sessions, extending an almost two-month slide as traders shift their attention away from supply-threatening storms and back toward a stronger dollar and evidence of falling demand. On Wednesday, oil prices settled 36 cents lower at $109.35 a barrel, a day after a dramatic, nearly $6 plunge in response to less damage from Hurricane Gustav than the oil industry feared. That brought crude prices in sight of $100 a barrel, a level not seen since April 1. A smaller-than-expected drawdown of U.S. gasoline stocks was the primary driver of Thursday's declines. In its weekly inventory report, the Energy Department's EIA said U.S. gasoline stocks fell by 1 million barrels to 194.4 million barrels for the week ending Aug. 29, less than the 1.8 million-barrel drop analysts surveyed by energy research firm had Platts expected. Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., said the inventory numbers may have been skewed by market irregularities caused by Gustav, but he said the market appeared to be taking the figures as more evidence of falling demand. "It's safe to say gasoline demand is still very weak. So far we haven't seen enough of a drop in pump prices to really alter that trend," Ritterbusch said. At the pump, a gallon of regular slid less than a penny overnight to a new national average of $3.678, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices remain well above the year-ago average of about $2.792 a gallon but have fallen more than 10 percent from the July 17 record average of $4.114 a gallon. A stronger dollar also weighed on oil prices Thursday. A rising greenback spurs investors to shift funds out of commodities like oil and precious metals, which are traditionally bought as hedges against inflation. Meanwhile, energy output in the Gulf of Mexico began to slowly come back online after the passage of Gustav. Some oil companies in the western Gulf whose equipment wasn't in the path of the storm began ramping up operations Wednesday and Thursday. However, 95.2 percent of oil production in the Gulf and about 87.5 percent of natural gas output remained shut down as of Thursday. The Gulf area is home to a quarter of U.S. oil production and 40 percent of refining capacity. Crude has dropped about $38, or 26 percent, since surging to a record $147.27 a barrel on July 11, as a U.S. economic slowdown spreads overseas and curbs demand for petroleum products. "Consuming countries like the U.S. and Japan are facing economic problems," said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo. "I think we're heading toward $100 a barrel and if we break that, to between $88 and $95." Still, analysts caution prices could spike again on an unforeseen geopolitical event or if OPEC countries scale back output. The Organization of the Petroleum Exporting Countries is scheduled to meet next Tuesday in Vienna and has indicated it may take action to defend the $100 a barrel level. The EIA also said U.S. crude stocks tumbled unexpectedly last week. Crude supplies dropped by 1.9 million barrels to 303.9 million barrels; analysts had expected supplies to increase by 500,000 barrels. Meanwhile, inventories of distillate fuel, which include diesel and heating oil, fell by 400,000 barrels to 131.7 million barrels. Analysts expected stocks to rise by 1.1 million barrels. In other Nymex trading, heating oil futures fell 5.51 cents to settle at $3.0237 a gallon, while gasoline futures fell 2.64 cents to settle at $2.7404 a gallon. Natural gas futures rose 5.8 cents to settle at $7.322 per 1,000 cubic feet. In London, October Brent crude fell $1.76 to settle at $106.30 a barrel on the ICE Futures exchange.

Gas Reserves Send Oil Prices Down Oil prices closed at their lowest level in five months Thursday as a lower-than-expected drop in U.S. gasoline supplies gave traders more reason to believe that a cooling economy is forcing Americans to drive less. Light, sweet crude for October delivery fell $1.46 to settle at $107.89 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month contract since April 4. Crude prices have fallen for five straight sessions, extending an almost two-month slide as traders shift their attention away from supply-threatening storms and back toward a stronger dollar and evidence of falling demand. On Wednesday, oil prices settled 36 cents lower at $109.35 a barrel, a day after a dramatic, nearly $6 plunge in response to less damage from Hurricane Gustav than the oil industry feared. That brought crude prices in sight of $100 a barrel, a level not seen since April 1. A smaller-than-expected drawdown of U.S. gasoline stocks was the primary driver of Thursday's declines. In its weekly inventory report, the Energy Department's EIA said U.S. gasoline stocks fell by 1 million barrels to 194.4 million barrels for the week ending Aug. 29, less than the 1.8 million-barrel drop analysts surveyed by energy research firm had Platts expected. Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., said the inventory numbers may have been skewed by market irregularities caused by Gustav, but he said the market appeared to be taking the figures as more evidence of falling demand. "It's safe to say gasoline demand is still very weak. So far we haven't seen enough of a drop in pump prices to really alter that trend," Ritterbusch said. At the pump, a gallon of regular slid less than a penny overnight to a new national average of $3.678, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices remain well above the year-ago average of about $2.792 a gallon but have fallen more than 10 percent from the July 17 record average of $4.114 a gallon. A stronger dollar also weighed on oil prices Thursday. A rising greenback spurs investors to shift funds out of commodities like oil and precious metals, which are traditionally bought as hedges against inflation. Meanwhile, energy output in the Gulf of Mexico began to slowly come back online after the passage of Gustav. Some oil companies in the western Gulf whose equipment wasn't in the path of the storm began ramping up operations Wednesday and Thursday. However, 95.2 percent of oil production in the Gulf and about 87.5 percent of natural gas output remained shut down as of Thursday. The Gulf area is home to a quarter of U.S. oil production and 40 percent of refining capacity. Crude has dropped about $38, or 26 percent, since surging to a record $147.27 a barrel on July 11, as a U.S. economic slowdown spreads overseas and curbs demand for petroleum products. "Consuming countries like the U.S. and Japan are facing economic problems," said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo. "I think we're heading toward $100 a barrel and if we break that, to between $88 and $95." Still, analysts caution prices could spike again on an unforeseen geopolitical event or if OPEC countries scale back output. The Organization of the Petroleum Exporting Countries is scheduled to meet next Tuesday in Vienna and has indicated it may take action to defend the $100 a barrel level. The EIA also said U.S. crude stocks tumbled unexpectedly last week. Crude supplies dropped by 1.9 million barrels to 303.9 million barrels; analysts had expected supplies to increase by 500,000 barrels. Meanwhile, inventories of distillate fuel, which include diesel and heating oil, fell by 400,000 barrels to 131.7 million barrels. Analysts expected stocks to rise by 1.1 million barrels. In other Nymex trading, heating oil futures fell 5.51 cents to settle at $3.0237 a gallon, while gasoline futures fell 2.64 cents to settle at $2.7404 a gallon. Natural gas futures rose 5.8 cents to settle at $7.322 per 1,000 cubic feet. In London, October Brent crude fell $1.76 to settle at $106.30 a barrel on the ICE Futures exchange.

Wall Street lower after release of Fed minutes Wall Street fell moderately in thin volume Tuesday as concerns about the path of Hurricane Gustav pushed oil prices higher and offset a better-than-expected reading on consumer confidence. Comments from the Federal Reserve about rising inflation added to the market's uneasiness. Investors remain wary about the impact of the credit crisis, higher oil prices, and housing slump is having on the economy. The Federal Reserve's release of minutes from its Aug. 5 meeting showed the central bank is concerned about creeping inflation and that it expected it would need to raise interest rates to try to contain rising prices. At that meeting, policymakers held rates steady because "American businesses and consumers were facing elevated borrowing costs and reduced credit availability." However, the Fed also said in the minutes that it was far from clear when a rate hike might come. There was some optimism at the start of the day on Wall Street after the Conference Board said its consumer confidence index rose to 56.9, up from a revised 51.9 in July; analysts had expected a reading of 53. That marked the second month in a row that sentiment improved, after a six-month slide since January. The Commerce Department reported that new home sales rose 2.4 percent in July. While analysts expected a drop in sales, the July increase followed a sharp downward revision to June's sales. However, concerns about Hurricane Gustav hitting installations in the Gulf of Mexico in the coming days caused energy prices to rise. A barrel of light, sweet crude rose $1.47 to $116.54. "The overall mood is still one of caution, there's not much out there to get investors excited," said Todd Salamone, director of trading at Schaeffer's Investment Research. "But, the bigger picture is that there hasn't really been a major breakdown considering all the bad headlines out there, from higher oil prices to the credit crisis and troubled housing sector." In late afternoon trading, the Dow Jones industrials fell 32.17, or 0.28 percent, to 11,354.08. Broader indexes were also lower. The Standard & Poor's 500 index fell 2.94, or 0.23 percent, to 1,263.90; the Nasdaq composite fell 18.27, or 0.77 percent, to 2,345.92. Stocks have fluctuated during the past two sessions in part because of light trading, with many people on Wall Street taking the last week of August off. Declining issues narrowly beat advancers by an 8-to-7 basis on the New York Stock Exchange, where volume came to a light 488.9 million shares. Bonds were lower. The yield on the benchmark 10-year Treasury note, which trades opposite its price, rose to 3.80 percent from 3.79 percent late Monday. The dollar hit a six-month high against the euro and surged to a 25-month high against the pound, while gold prices fell. The widely watched Standard & Poor's/Case-Shiller home price index tumbled the most ever during the second quarter, falling 15.4 percent compared to the same period a year ago. In corporate news, shares of Fannie Mae and Freddie Mac climbed for a second day amid expectations in some Wall Street quarters that the mortgage financiers will be able to weather the housing storm without a government rescue. Fannie shares rose 51 cents, or 9 percent, to $5.69 in morning trading, while Freddie soared 63 cents, or 19.1 percent, to $3.92. Smithfield Foods Inc., the nation's largest hog producer and pork processor, said Tuesday it swung to a fiscal first-quarter loss due in part to a $20.1 million write-down in the value of commodities contracts. Shares fell 76 cents, or 3 percent, to $22.84. Credit Suisse Group said it has acquired a majority stake in U.S.-based company Asset Management Finance Corporation for $384 million of newly issued Credit Suisse stock. Shares of Credit Suisse fell 47 cents to $44.61. The Russell 2000 index of smaller companies rose 2.49, or 0.35 percent, to 723.03. Overseas, Japan's Nikkei stock average fell 0.78 percent. At the close, Britain's FTSE 100 was down 0.63 percent, Germany's DAX index was up 0.69 percent, and France's CAC-40 was up 0.29 percent.

UnionBanCal, Mitsubishi UFJ Agree to Deal UnionBanCal'sUB shares surged 12% early Monday after Mitsubishi UFJ boosted its offer by $500 million for the remaining 35% stake it doesn't already own to $3.5 billion. The San Francisco-based bank and Mitsubishi's subsidiary, the Bank of Tokyo-Mitsubishi UFJ, agreed for it to purchase the remaining publicly held shares for $73.50 a share in cash, up from the $3 billion, or $63 a share, tender offer it made last week. The Japanese bank had first bid for the remaining stake back in April for $58 a share. The Bank of Tokyo-Mitsubishi UFJ, which has owned a stake in UnionBanCal since 1996, currently owns 65.4% of UnionBanCal. Monday's offer represents roughly a 10% premium to UnionBanCal's closing market price on Friday. UnionBanCal had told shareholders to reject the offer last week, saying Mitsubishi was "substantially undervaluing" the company as a result of the housing crisis. Despite being headquartered in one of the most troubled states in the mortgage meltdown, UnionBanCal has remained relatively unscathed. Market observers had predicted that the Japanese bank would raise its offer. UnionBanCal's management and a special committee made up of directors, outside counsel and financial advisors say they will recommend Monday's offer to shareholders, the companies say in a joint press release. The deal is valued at $3.5 billion and values all of UnionBanCal at $10.1 billion. Under terms of the deal, Mitsubishi would offer to acquire the publicly held shares through the cash tender offer to be followed by a second-step merger in which any untendered shares would also be acquired at the same price, the companies say. The Japanese bank plans to begin buying shares by Aug. 29. "This agreement will provide us with a wide range of opportunities to expand our presence in the U.S. market through our enhanced relationship with UnionBanCal," says Bank of Tokyo President Katsunori Nagayasu. "The continuing success of UnionBanCal, particularly in the challenging economic environment in the United States, is a testament to the quality of its management and board and the strong relationship we have built together over the years." Shares of UnionBanCal recently were rising $11.9% to $73.26.

Lehman Jumps on News of Korean Interest Lehman Brothers shares surged early Friday after a report that the Korea Development Bank would consider acquiring the struggling U.S. investment bank. Earlier this week, the New York Post had reported that talks between the two banks had died, as analysts predicted up to $4 billion in third-quarter losses. "We are studying a number of options and are open to all possibilities, which could include [buying] Lehman,'' a Korea Development Bank spokesman said, according to a Reuters report. Shares spiked more than 15% to $15.78 on the news. Because it is heavily exposed to the residential mortgage market and the smallest of the major U.S. investment banks still standing following the collapse of Bear Stearns earlier this year, Lehman's shares have been hit hardest in the credit crisis. The company also took a bruising in a very public battle with hedge fund manager David Einhorn of Greenlight Capital, who took issue with its accounting. Following the resignation of its COO and CFO in June, Lehman has been shopping itself to Asian investors at the same time it has been talking with potential buyers of its $40 billion in real estate assets and its highly regarded investment management businesses. At the close of trading Tuesday, Lehman's shares were down roughly 80% from their 52-week high. Lehman also has been shopping its asset-management business, including Neuberger Berman, to private-equity firms.

UBS Posts Loss, Will Separate Businesses UBS Tuesday announced a second-quarter loss and says it will separate its three major business units: private wealth management, asset management and investment banking. The firm posted a net loss attributable to shareholders of 358 million Swiss francs a share, vs. a profit of 5.55 billion Swiss francs in the second-quarter last year. The bank said it wrote down $5.1 billion in exposures to U.S. residential real estate, which drove the losses. Among major global financial institutions, UBS has been one of the hardest hit by the credit crisis. It has also been under investigation from U.S. regulators, both for allegedly helping clients dodge taxes and for making false promises to individual investors related to auction-rate securities. UBS has agreed to buy back nearly $19 billion worth of auction-rate securities in a settlement with state and federal regulators, a day after Citigroup did the same. Morgan Stanley and Merrill Lynch have voluntarily agreed to buy back securities and many other major global banks operating in the U.S. are negotiating with regulators in an attempt to settle charges that they overstated the securities' safety to investors. UBS has been under pressure from investors to sell its investment banking unit, but says it has no plans to do that. "Our review has clearly revealed the weaknesses associated with the integrated 'one firm' business model," said Chairman Peter Kurer. "Some of these weaknesses -- such as the blurring of the true risk-reward-profile of individual businesses -- are the source of substantial risk, as we have seen in the past few months. Others have led to the creation of excessively elaborate processes and unnecessary layers of complexity." UBS shares recently were dropping 4% to $20.82 in trading on the New York Stock Exchange.

Toll Revenue Declines, but Beats Estimates Toll Brothers' Wednesday reported quarterly revenue that topped estimates, and the company's CEO cited growing pent-up demand from homebuyers who have postponed buying homes over the past three years. Toll's homebuilding revenue totaled $797 million in the third quarter, down 34% from a year ago but better than the $746 million analysts expected, according to Thomson Reuters. Toll, in its preliminary results, also said new orders fell 31% from a year ago. While results remain dismal right now, CEO Bob Toll offered some signs of hope. "When we run promotions and work the phones for a market, our rate of deposits improves significantly," he said in a statement. "We believe the consumer's confidence in the housing market is the key to its recovery," Toll said. While cancellations of orders as a percentage of backlog remained high relative to history, Toll said the raw number of cancellations in the quarter were the lowest total in over two years, which he called a "positive sign." Toll's stock edged up 18 cents, or 0.9%, to $20.82 in recent trading Wednesday morning.

Nvidia Puts on Brave Face After Loss Nvidia "miscalculated" the competition, resulting in the chipmaker's first quarterly loss in six years. But CEO Jen-Hsun Huang told investors that the company has "dusted" itself off and is ready to begin its comeback. Exactly when or how the company will come back is still a little hazy. In a post-earnings conference call Tuesday, Nvidia said it wouldn't be able to sell its most profitable output of chips until it burns off excess inventory of lower-margin products. And the company said sales in the current quarter will "grow slightly," which smells like a miss, given that the average analyst expectation called for sales to grow 13% sequentially to $1.01 billion. Nonetheless, shares of Nvidia were up 10.2%, or $1.13, at $12.20 in extended trading Tuesday on relief that business conditions at least are not getting significantly worse. For one thing, says Pacific Crest Securities analyst Mike McConnell, the damage stemming from Nvidia's defective graphics chips appears to be under control. Nvidia took a $196 million charge in the second quarter to cover warranty costs -- which was within the range it predicted last month -- and Nvidia said it didn't expect the charges to re-occur. And the chipmaker said it expects gross margins in the current quarter to increase slightly, which McConnell said is better than the flat gross margins expected by Wall Street. That doesn't mean Nvidia is anywhere close to thriving, however. Even excluding the product warranty charges, Nvidia's second-quarter gross margin was 39%, down from 44.6% in the first quarter. And the chipmaker is still facing intense competition from Advanced Micro Device's ATI division, whose latest line of graphics chips are garnering rave reviews and threatening to take market share from Nvidia, if they haven't already. McConnell says Nvidia may not be able to reverse any market share losses to AMD until the second quarter of next year at the earliest. "Before now and then it's going to be a difficult stock to make a lot of money on," says McConnell, who rates Nvidia an outperform. Nvidia spooked the Street in July, when it warned investors that sales in the second quarter would be significantly below expectations. The company's stock fell more than 25% in the following days. On Tuesday, Nvidia delivered the final tally for the quarter, with sales down 5% year-over-year at $892.7 million. Analysts had been expecting $908.3 million. Sales of Nvidia's desktop graphics processors declined 40% sequentially, while average selling prices fell 25%. "The desktop PC market around the world weakened during the quarter. And our miscalculation of competitive price position further pressures our desktop GPU business," Huang said in a statement. Nvidia said prices for its notebook graphics chips remained flat in the second quarter, while sales were up 8% sequentially. Nvidia posted a net loss of $120.9 million, or 22 cents a share, vs. net income of $172.7 million, or 29 cents a share at this time last year. The results included a $196 million charge against the company's cost of revenue to account for customer warranty and repair costs associated with defects in its previous generation of chips. Excluding that charge, as well as the associated tax impact, and 7 cents a share worth of stock option compensation expenses, Nvidia said it earned 13 cents a share. Analysts polled by Thomson Reuters were expecting 12 cents a share excluding stock compensation charges. With Nvidia expecting prices for graphics chips to remain stable going forward, the company needs to find ways to cut costs in order to improve its profit margins. But while Huang said the company has plenty of levers to pull to improve margins, the obvious ones appear to be running into trouble. Nvidia has begun producing chips with smaller circuits, which means their costs are inherently lower. But executives said the company will not be able to reap the benefits until it unloads its inventory of older chips. And despite the mission to cut costs, Nvidia said it expects operating expenses to rise 5% sequentially in the current quarter. "Our op ex is too high," Huang said. "We need to moderate that." For now though, Wall Street can only speculate as to how Nvidia plans to do that.

Revised Yahoo! Vote Lifts Scorn Level Revised election results from Yahoo!'s shareholder meeting reveal far more disenchantment with Chairman Roy Bostock and Chief Executive Jerry Yang than initially reported. Yahoo! acknowledged a tabulation error late Tuesday by Broadridge Financial Solutions, an independent voting intermediary that processes proxies for banks, brokers and institutions. In this case, Broadridge had been hired by Yahoo!'s largest shareholder, Capital Research and Management, which on Monday challenged the final tally, maintaining that its votes had been undercounted. The corrected version of the board election results show Yang with 33.7% "withhold" votes, which are essentially equivalent to "no" votes - that's far higher than the 14.6% Yahoo! initially reported at the end of Friday's meeting. Bostock received the most withhold votes, with 39.6%. That compared to Friday's count of 20.5%. Ron Burkle trailed behind Bostock with 37.9% withhold votes vs. the 18.8% originally reported. Arthur Kern received slightly less withhold votes than Yang but still placed among the highest, with 31.7% vs. the 22.1% from the initial tally. Bostock, Burkle and Kern had received the most withhold votes at last year's shareholder meeting as well, due to criticism over their roles as members of Yahoo!'s compensation committee. The majority votes cast in favor of reelecting the board also dropped as a result of Tuesday's revisions. Yang received 66.3% "for" votes instead of the 85.4% reported on Friday. Bostock received 60.4% instead of the 79.5% reported on Friday. None of the board members fell short of winning a majority vote even with the recount, which means they will hold onto their positions. But the new numbers put more pressure on Yang and the board to deliver on their promises to grow the company and also take away their bragging rights over a sizeable election victory. Shares of Yahoo! closed Tuesday up 2.3% to $19.82.

MGM Results Boost Casino Stocks Casino stocks were trading higher Tuesday, after MGM Mirage's Las Vegas results fared better than the bloodletting that many expected and the company announces financing commitments for its newest project. The entire gambling sector has been battered this year on fears that the economic slowdown is set to ravage profits at casino operators, especially those with a heavy focus in Las Vegas, such as MGM. So far this year, results at MGM's Vegas casino are down but still manageable. Visitors continue to flock to the city but only at lower room rates. And once there, guests tend to be spending less. In the second quarter, MGM's revenue per available room at its Las Vegas Strip casinos fell 5% from a year ago as rates fell, but occupancy remained high at 97% (off from 98% last year). The company's Bellagio Casino -- which some consider Vegas' most luxurious destination -- reported its highest-ever quarterly hotel revenue. Overall, the company's Vegas properties saw a 10% decrease in slots revenue and a 9% drop in property EBITDA. About 85% of MGM's profits come from Vegas, as the company owns a large collection of properties on the Strip, including Mandalay Bay, the Mirage and MGM Grand. The company also announced $1.65 billion in financing commitments from banks for its CityCenter development in Vegas. MGM is trying to land a $3 billion total package. MGM's overall net income from continuing operations totaled $113 million, or 40 cents a share, compared with profit of $182.9 million, or 62 cents a share, a year ago. Analysts expected earnings of 42 cents a share, according to Thomson Reuters. Nonetheless, investors cheered the MGM report and sent shares up $2.77, or 8.9%, to $33.77 in recent trading Tuesday. Lately, some investors have been saying casino stocks have hit bottom and are due for a large rally.

Celgene Beats Targets, Guides In Line Celgene reported an all-around earnings beat Thursday and raised full-year guidance, but to levels in-line with the current Street consensus estimate. Shares of the Summit, N.J.-based biopharmaceutical company, up 53% for the year, rose $1.37, or 1.9%, to $71.82 in recent early trading Thursday. On a GAAP basis, Celgene reported net income of $119.9 million, or 26 cents a share, vs. $54.8 million, or 13 cents a share, in the prior-year period. The company reported adjusted profit of $172.7 million, or 37 cents a share, on revenue that rose 63% to $566.6 million ($571.5 million on a GAAP basis). Results surpassed the expectations of analysts surveyed by Thomson Financial who'd predicted earnings of 35 cents a share on revenue of $537.8 million. Celgene also beat consensus estimates in the first quarter, both EPS (36 cents vs. the consensus estimate of 34 cents) and revenue ($462.5 million vs. $444 million consensus). In the recent quarter, increased revenue was supported by sales of its multiple myeloma drug Revlimid, which increased 80% to $325.8 million, beating the Wall Street consensus target of $310 million. Sales of Thalomid came in at $131.6 million, edging past a $127 million expectation, and sales of myelodysplastic syndromes (MDS) drug Vidaza totaled $59.7 million, vs. a $54 million consensus. Celgene upped its R&D spending to $133.2 million in the second quarter, compared to $87.4 million the year prior, both on a non-GAAP basis, to support clinical development and advance regulatory filings. Toward the end of the second quarter, competitor SuperGen said its Vidaza rival Dacogen failed a late-stage trial -- which increased expectations for Vidaza sales in the second half of 2008. Looking ahead, the company gave new guidance for adjusted earnings of roughly $1.50 a share (compared to prior guidance of $1.45 a share) on revenue of roughly $2.2 billion (compared to $2.1 billion), a 60% year-over-year increase.

Bristol's Profit Rise Beats Expectations Bristol-Myers Squibb reported an earnings and profit beat Thursday as the drugmaker seeks to uncover more cost-savings and external pipeline prospects. Shares of the New York-based company were rising 48 cents, or 2.2%, to $22.37 in recent trading Thursday. Bristol-Myers earned $722 million, or 36 cents a share, a 6-cent improvement over the comparable quarter last year. On an adjusted basis, the company reported profit of 43 cents a share, vs. 31 cents a share in 2007. Net sales increased 16% to $5.2 billion -- including a 5% favorable foreign exchange impact. The quarter beat Wall Street expectations for earnings of 40 cents a share on revenue of $5.09 billion. While Big Pharma companies have struggled to wrangle U.S. sales, Bristol announced a 17% increase in stateside pharmaceutical sales to $2.6 billion, attributing increases to higher sales of Plavix and Abilify, its HIV and hepatitis portfolio, and recent launches of Orencia and Ixempra. U.S. sales of Bristol's lead product Plavix increased 19%, although U.S. prescriptions increased by 11%, according to Bristol. Global Plavix sales increased 17% to $1.38 billion. In December 2007, the company announced a $1.5 billion "productivity transformation initiative" to be completed by 2010, and on Thursday announced a plan to save an additional $1 billion by 2012. Bristol said it will provide more information on the second set of productivity efforts and their costs by the end of 2008. "We are selecting the best of biotech and the best of the pharmaceutical industry and combining these traits into a model which will position us as a next-generation BioPharma leader," said CEO James Cornelius in a press release. Bristol says it's focusing on supplementing internal R&D with strategic partnerships and acquisitions. During the second quarter, the company entered an agreement with KAI Pharmaceuticals to develop and commercialize an acute heart attack medicine and completed the acquisition of cancer therapeutics company Kosan BioSciences. Meanwhile, the company said in April that it would sell its ConvaTec business to Avista Capital Partners and Nordic Capital Fund VII for roughly $4.1 billion -- it expects to close the divestiture by August. Looking ahead, Bristol reaffirmed guidance for GAAP earnings between $1.36 and $1.46 a share and adjusted earnings of between $1.60 and $1.70 a share for 2008. Bristol said it expects adjusted earnings to grow by at least 15% compounded annual growth through 2010 using 2007 as a base, without altering the base for the ConvaTec business and excluding costs related to its "productivity transformation initiative."

FTSE closes 0.2 pct lower as banks, insurers weigh Britain's blue-chip index ended 0.2 percent lower on Friday, as banking and insurance stocks fell on a gloomy economic outlook, outweighing gains in commodities and retail sector shares. The commodity-heavy FTSE 100 .FTSE closed down 9.7 points at 5,352.6, after losing 1.6 percent on Thursday. The benchmark index ended the week with a decline of 0.4 percent -- the ninth negative weekly close in the past 10 weeks. Banking stocks were the biggest sectoral loser, as investors remained concerned about more writedowns and the grim economic outlook. "The FTSE will struggle to make progress in the short term. The first sector that needs to recover is the banking side, but the economic news generally is deteriorating," said Roger Cursley, UK strategist at Investec. "Banks would continue to struggle. There remains question marks that the banking sector as a whole in the UK has raised enough additional capital." Figures showed on Friday that Britain's economy grew at its weakest pace in three years in the second quarter of this year, while data in the previous session showed the pace of existing U.S. home sales tumbled to a 10-year low, reminding investors of the problems plaguing the world's largest economy. But sales of newly constructed U.S. single-family homes were stronger than expected in June. New orders for long-lasting U.S. manufactured goods also rose unexpectedly in June. Royal Bank of Scotland, HSBC, Lloyds TSB and Standard Chartered fell between 1.2 and 2.7 percent. Shares in insurance companies fell sharply after German reinsurer Munich Re, the world's second-biggest, issued a profit warning, saying turmoil in global markets would hurt its second-quarter earnings. Hannover Re, the world's fourth-biggest reinsurer, also said that it would be difficult for the company to reach full-year targets if capital markets did not calm down. Among UK insurance companies, Aviva fell 4.2 percent, Old Mutual declined 2.1 percent, Prudential shed 3.7 percent and Legal & General dropped 6.7 percent. "The FTSE has seen three days of losses against two (days) of gains as it continues to hover just ahead of the 5,300 level, which increasingly appears to be the area at which buyers re-enter the market," said Anthony Grech, analyst at IG Index. But retailers bucked the trend, gaining after facing pressure in previous weeks. Britain's third-biggest supermarket group J Sainsbury added 3 percent and Wm Morrison rose 1.4 percent. Retailer Next (NXT.L: Quote, Profile, Research, Stock Buzz) gained 1.8 percent, while the world's third-largest food retailer Tesco was up 0.2 percent. Miners were mixed, with BHP Billiton up 0.8 percent, Ferrexpo rising 4 percent and Xstrata gaining 1.7 percent. But Anglo American, Vedanta Resources, Lonmin, Antofagasta and Eurasian Natural Resources fell between 0.4 and 7.3 percent. Shares in oil and gas companies rose, despite a 1.5 percent decline in oil prices. Gas producer BG Group advanced 3.8 percent to be among the top FTSE 100 .FTSE gainers after Credit Suisse lifted its price target to 1,600 pence from 1,560 pence. BP, Royal Dutch Shell, Cairn Energy and Tullow Oil added between 0.3 and 1.5 percent. Nuclear operator British Energy was down 0.3 percent. A source briefed on the matter said the company had agreed to be taken over by French utility EDF for around 12.4 billion pounds ($24.61 billion).

Dollar mixed on inflation reports The euro gained ground against the dollar Thursday following reports that showed inflation rising in both Europe and the U.S. The 15-nation euro bought $1.5850 in Thursday morning European trading, up from $1.5810 in New York late Wednesday. The British pound edged up to $1.9997 from $1.9992, but the dollar climbed to ¥105.36 from ¥104.93. On Wednesday, the European Union said soaring fuel and food prices drove June inflation in the 15-nation euro zone to a 16-year record high of 4%, up from 3.7% in May. The European Central Bank has tried to cool high prices by raising interest rates from 4% to 4.25% - but it acknowledged that inflation is likely to stay elevated until the end of 2009.

Stocks set for higher open Stocks looked set for a positive open Thursday after JPMorgan Chase reported better-than-expected earnings for the second quarter and oil prices fell again. At 7:09 a.m. ET, Nasdaq and S&P futures were higher, with a comparison to value suggesting a higher start for Wall Street. Stocks soared Wednesday after investors finally got some good news out of the banking sector and oil prices continued their descent. The Dow Jones industrial average ended the session more than 2.5% higher. Banks Investors are keeping a close eye on financial shares as earnings in the bank sector keep trickling in. JPMorgan Chase reported a 52% decline in net income Thursday, but earnings topped expectations. JPMorgan posted a profit of $2 billion, or 54 cents per share. Analysts polled by Thomson Financial had expected to earnings of 44 cents per share. Merrill Lynch is due to post earnings after the market close. Financial shares got a much-needed boost Wednesday after Wells Fargo reported better-than-expected earnings and raised its dividend. Techs The earnings onslaught continues with tech heavyweights Google, Microsoft and IBM scheduled to release their results after the market close. Online auction site eBay reported a jump in quarterly profit late Wednesday, but offered a weak outlook for the current period. Energy Oil prices continued to fall after a sharp decline over the past two sessions. In electronic trading, crude futures slipped $1.05 at $133.55 a barrel. Oil prices shed more than $10 a barrel in the previous two sessions. Economy A reading on building permits and housing starts is on tap before the market open. The Philly Fed, a regional manufacturing survey, comes out at 10 a.m. ET. Other markets Stocks in Asia rose. Markets in Europe also advanced in morning trading.

eBay Shares Need One Heckuva Beat eBay is expected to top its second-quarter guidance but probably won't bowl anyone over unless it can show significant growth in the value of products sold on the site. "We believe a beat and modest-raise quarter is anticipated as sentiment has improved over the last couple of weeks, but we continue to believe that gross merchandise volume growth is the most important metric as we look for signs of stabilization and reacceleration in core business and evidence that buyer demand is improving, or at least not worsening," wrote analyst Douglas Anmuth of Lehman Brothers in his most recent note. Anmuth expects the total value of all successfully closed listings between users on eBay's online trading platforms to grow by only 10% in the second quarter, a drop from 12% in the previous quarter. And although he noted that eBay has beaten estimates and raised full-year guidance virtually every quarter for the last four years, it may not be enough. As evidence, he pointed to eBay's past five quarters, where the online auction site beat the average consensus estimate by 11% but still saw its shares fall by an average of 4% the day after reporting results. Estimates and company guidance have typically been driven by such factors as favorable foreign exchange, share buybacks and lower tax rates, something that investors have become wise to, which might explain their disappointment even when eBay hits or exceeds expectations. "We believe these lower-quality factors are increasingly being backed out by investors, who are more focused on organic revenue growth and gross merchandise volume growth," Anmuth wrote. For the second quarter, eBay expects earnings in the range of 39 cents and 41 cents on revenue in the range of $2.1 billion and $2.15 billion. Analysts surveyed by Thomson Reuters predict earnings of 41 cents on revenue of $2.17 billion. For the year, the company offered earnings guidance in the range of $1.70 and $1.75 on revenue in the range of $8.7 billion and $9 billion. Analysts predict earnings of $1.74 on revenue of $9.01 billion. eBay has seen a number of changes in recent months, including a new chief executive, John Donahoe, who took over the company on March 31. It has also implemented a new fee structure that charges sellers less to list their items but more if they close the deal. Other changes include a ranking system that takes into account a seller's rating as assessed by buyer feedback. Sellers are also no longer allowed to leave feedback on buyers, although buyers can still comment on sellers. Jeffrey Lindsay, an analyst at Sanford Bernstein, said up until recently, eBay had not been paying much attention to problems on its site such as seller fraud and poor customer service, and also had a hard time keeping up with its main rival, AmazonAMZN. "The new management team seems to be getting to grips with these problems for the first time and has already instigated a major restructuring of fees to reduce up-front listing charges -- encouraging more listings overall but for many popular categories of goods actually increasing fees overall -- we estimate by up to 7%," he wrote in his most recent report. Although sellers may have been angered by eBay's fee changes -- as demonstrated by a boycott staged in February -- it doesn't seem to have much of an impact, at least not yet. "Despite their seller strike in February, the fee change at eBay is neutral overall, as listings in the second quarter are actually 17% higher than they were during the same period last year," Lindsay noted. "This leads us to believe that eBay is on track to report a strong quarter." Mark Mahaney, an analyst for Citigroup, also expects eBay to beat estimates and raise its full-year guidance. Although high fuel prices and concerns about the economy have had a negative impact on online retail in general, eBay may feel a somewhat muted effect since a lot of its audience consists of value shoppers. At the same time, he expects management's comments on full-year guidance to be conservative because of the economic outlook and changes in eBay's marketplace segment. Mahaney further noted that eBay's shares are down 13% since it reported first-quarter results, and 19% year to date. "Our interpretation is that the market is likely assuming another slight Beat & Raise quarter," he wrote. "The issue will be whether a Beat & Raise is enough of a catalyst to get the shares to move up from here."

FTSE ends 1.2 pct lower, burdened by banks, oil Britain's blue-chip index ended lower on Friday during a relatively quiet session as banking stocks slipped following a bearish Goldman Sachs note and oil companies tracked softer crude prices. The FTSE 100 .FTSE shed 63.8 points, or 1.2 percent, to 5,412.8 in thin trading volumes as investors took a breather following the volatile data-fuelled session on Thursday. "If you look at the technicals and the fundamentals, people think there is still some way for it to fall, probably another 250 points before we get any recovery," said Neil Parker, market strategist at Royal Bank of Scotland. "Nobody wants to be long in this market ... I would be particularly worried by a lot of inflation numbers that are coming out," he added. Britain's benchmark index has now notched seven consecutive weekly losses. Goldman said in a note to clients that European banks might need to raise 60 to 90 billion euros if a turn in the credit cycle triggered losses comparable with those seen a decade ago. The brokerage also said it had lowered 2008-2010 estimates for over 40 banks and cut price targets on a number of them, including Barclays, Royal Bank of Scotland, Deutsche Bank and UBS. Royal Bank, Barclays, HBOS , HSBC and Standard Chartered were down between 2.1 and 4.5 percent. "With the U.S. on holiday, the markets have taken their lead from ... a particularly bearish note from Goldman Sachs regarding banking stocks," said Ryan Kneale, an analyst at BetsForTraders.com. Bradford & Bingley lost 18 percent after the mortgage lender said it planned to increase its rights issue to 400 million pounds ($794 million) after U.S. private equity firm TPG Capital pulled out of a plan to buy a stake. Friends Provident topped the FTSE 100 losers however, down 6.9 percent after a source familiar with the matter said late on Thursday that Swiss Life is no longer considering a bid for Lombard, the high-end insurance unit of the insurer. Friends Provident and Swiss Life both declined to comment. OILS SLIP. Heavyweight oil shares tracked falling commodity prices. U.S. crude prices CLc1 fell below $145, but stayed within range of the record highs hit in the previous session of just under $146 a barrel. Prices have jumped about 50 percent this year, with recent gains made on heightened tension between Israel and Iran. BP fell 1 percent and rival Royal Dutch Shell dipped 1.3 percent, while Tullow Oil fell 2.2 percent. Firm crude prices fanned existing concerns about inflation, as price pressures threaten to jeopardise earnings and curb consumer spending. An uncertain economic outlook also continued to cast a shadow over the British market. An annual discretionary income study by Ernst & Young showed the average British household is now 15 percent worse off than it was five years ago. Shares in Marks and Spencer were down 3.8 percent after hitting their lowest since late 2001 as joint house broker Citi cut its rating to "sell" from "buy" and on soft weekly sales data from rival John Lewis. Some retail stocks rebounded however, with Tesco, Wm Morrison Supermarkets and Sainsbury flat to 5.2 percent higher after being hit hard in recent sessions as traders said the shares offer short-term value. Vague merger and acquisition hopes also buoyed the stocks, traders said. The retail sector has been sold off heavily in recent sessions after Marks & Spencer issued a shock profit warning on Wednesday. "Volume down on the day," said Ian Hooper, an investment manager at Redmayne-Bentley. "No data, no U.S. and of course Friday afternoon no-one wants to take positions ahead of the weekend. The net result is drifting."

VeriSign Gets New CEO Digital infrastructure services company VeriSign has brought back founder and chairman Jim Bidzos to replace outgoing CEO, William Roper, who resigned after just about a year in the top job. The move is the latest in a series of management shake-ups at the troubled digital services company. Bidzos will be the president and CEO of VeriSign on an interim basis, the company said. Roper, whose resignation is effective June 30, had taken over from long-time CEO, Stratton Scalvos, who left unexpectedly in May 2007. As the company's founder and initial CEO, Bidzos has served as either chairman or vice chairman of the board of directors of VeriSign since April 1995. Bidzos had left the company for a few years to go to RSA Security, now a division of EMC, and returned to the role of the chairman at VeriSign in August 2007. "VeriSign remains committed to our strategy of focusing the company on its core businesses while continuing the divestiture of all non-core operations, which will proceed as planned," said Bidzos in a statement. "We continue to expect that most sale transactions will be substantially completed this year." At its analyst day in November, VeriSign said it will divest its businesses including communications, billing and commerce to focus on security, where it competes with companies such as Symantec and McAfee and domain name registry services. VeriSign also said it expects second-quarter revenue will meet or exceed current consensus estimates. Analysts are expecting earnings of 23 cents a share on revenue of $231.39 million, compared with EPS of 25 cents on revenue of $376.26 million, a year ago. The company will announce its results on Aug. 6. Shares of VeriSign closed down 52 cents, or 1.4%, to $36.70 in the shortened trading session Thursday. VeriSign's stock is down about 1.1% since the beginning of the year

Micron Sees More Red Ink Micron posted its sixth consecutive quarterly loss Thursday, as the chipmaker continues to feel the effects of falling memory prices. Boise, Idaho-based Micron said it lost $236 million in its fiscal third quarter, or 30 cents a share, worse than the average analyst expectation of a 28 cents a share loss. At this time last year, Micron recorded a $225 million net loss, or 29 cents a share. Micron said sales in the three months ended May 29 totaled totaled $1.5 billion, exceeding the $1.47 billion expected by Wall Street analysts. At this time last year, Micron had sales of $1.29 billion. Shares of Micron 11 cents, or 1.57%, to $6.88 in after-hours trading. The company did not provide a forecast for the current quarter, although it was scheduled to host a conference call with analysts later Thursday.

Palm Pummeled After Missing Estimates Smartphone maker Palm reported a wider-than-expected loss in the fourth quarter as revenue declined about 26%. Shares of Palm fell more than 7% in after-hours trading to $6.03. The company lost $43.4 million, or 40 cents a share, compared with net income of $15.4 million, or 15 cents a share, the same quarter a year ago. Excluding charges, the loss was was $23.9 million, or 22 cents a share. Revenue fell to $296.2 million from $401.3 million a year ago. Analysts polled by Thomson Reuters were expecting revenue of $301.1 million and a loss of 18 cents a share, excluding charges. Smartphone sell-through for the quarter was 968,000 units, up 29% from the year before, said Palm. "We continue to invest in Palm's future and remain focused on building long-term value," Palm CEO Ed Colligan said in a statement. "Centro is a tremendous hit, we are gaining market share, and we believe with this momentum, and the launch of new Windows Mobile products, we will turn the corner and return to revenue and margin growth." Palm launched its $99 Centro smartphone on Sprint Nextel's network last year. Shares of Palm closed down 30 cents, or 4.4%, to $6.54. Palm's poor results come a day after its larger rival Research In Motion fell shy of consensus estimates for the first quarter and offered mixed outlook for the current quarter. RIM shares closed down $18.88, or 13.3%, to $123.46.

RIM Shares Continue to Drop Research In Motion continued to lose ground two days after the company's shaky first quarter and a disappointing outlook for the current quarter. Shares of RIM were down 3.4%, or $4.25 to $119.21 Friday. That was on top of a 13.5% hit the day before. But some portfolio managers and analysts believe that the BlackBerry maker's shares may have just been beaten down too much, and that the stock is ripe for buying on the pull back. "The sell-off is overdone as I do think RIM is a market-share taker in the smartphone category and we are still in the early innings of the move towards smartphones," says Romeo Dator, co-portfolio manager of the All American Equity Fund at U.S. Global Investors. The fund holds shares of RIM in its portfolio. RIM is a "must-own stock for growth managers," adds Rob Sanderson, an analyst at independent research firm American Technology Research. Sanderson, one of the most bullish analysts covering RIM, reiterated his buy rating and $205 price target on the stock in a research note Friday. "The number of technology stocks with over $1 billion in quarterly sales that are growing in triple digits is one," he wrote. "For RIM, given the early stage of the market penetration, extraordinary growth will be sustainable for some time." RIM's revenue in the first quarter rose 107% to $2.24 billion from $1.08 billion a year ago. But that was offset by selling, general and administrative expenses that increased 22% compared to expectations of a 17%-to-18% rise and a 28%-to-30% jump in the next quarter. The company's capital expenditure also rose to $195 million, about $15 million more than guidance, and up from $66 million in the same quarter the year before. The spike in RIM's spending has been part of a growth strategy that called for increased marketing, more engineers and an expansion of its network operations center. RIM reassured analysts on the company's recent earnings call that it is making the investments to take advantage of the greater demand it expects to see later this year as competition in the smartphone market intensifies. The company plans to meet the competition head on, with the release of the Blackberry Bold, a 3G phone with a very attractive screen and full keyboard, in the summer. Analysts also expect the company to launch a new touch-screen phone and refresh its older models such as the Pearl. Still, Dator says he can understand why many investors feel let down. "The market does not like to be disappointed when a stock sells at such a P/E (ratio of price to earnings) level," he says. RIM trades at nearly 32 times its earnings estimates for fiscal 2009. Despite the sell-off RIM shares are ahead of its peers. RIM's stock is up about 4.5% since the beginning of the year. By contrast, AppleAAPL is down 14% during the same period. Competitor MotorolaMOT has declined 54%, and NokiaNOK has lost 35%. That's still small consolation for RIM investors who are seeing the stock off nearly 20% from its 52-week high. A bounce back could be a while away, cautions Dator. "I think investors will wait for a quarter to see what impact increased operating expenses has on unit shipments and margins," he says.

Lehman Brothers Sale Seems Unlikely While the rapid deterioration at Lehman Brothers, evidenced Thursday with the ouster of two top executives, has reminded many of Bear Stearns' downfall, few expect the firm to meet the same fate. Many investors fear that Lehman, which on Thursday ousted CFO Erin Callan and COO Joseph Gregory three days after it warned of massive loss for the second quarter, has some speculators floating names of potential buyers. Bear, on the verge of bankruptcy, in March agreed to sell itself to JPMorgan Chase after the firm's stock was relentlessly hammered by rumors about its liquidity position. Bear shareholders approved the deal last month. But several industry observers say Lehman can survive, because the firm's situation is different in a lot of ways to the one Bear faced. "Right now the information ...is quite opaque," says Cubillas Ding, a senior analyst in London at Celent. "It's a case of when people are unsure of they assume the worst." Even if there was a sale, "many of the U.S. players [that could conceivably buy Lehman] are in the same boat. They're working through their own crunch situation," Ding says. "It's not clear whether anyone else can be in a position to do a takeover." Names of potential buyers do not include a perfect fit. JPMorgan just digested Bear. European bank Barclays, would have a lot of overlap in bond trading. RealMoney.com contributor Doug Kass on Thursday speculated private equity firms Blackstone Group or J.C. Flowers could take a minority stake in Lehman. Other sources told TheStreet.com private equity investor Citadel or money manager BlackRock also could be in the mix. Michael Hecht, an analyst at Bank of America Securities, noted the liquidity available to Lehman via the Fed window, which was not available to Bear. He also pointed out that Lehman doesn't have the sizable prime brokerage business that led to "run-on-the-bank" issues" at Bear, he wrote in a Thursday note. "That said, with Lehman's still-sizable troubled asset exposures and need to de-leverage (which we suspect is being forced by regulators), we see the stock languishing here and prefer to recommend investment banks with more diverse (by business and geography) business models like Morgan Stanley MSor Merrill Lynch MER," Hecht wrote. Bank of AmericaBAC Chairman and CEO Ken Lewis, speaking at The Wall Street Journal's "Deals and Dealmakers" conference in New York this week, shrugged off the possibility of acquiring a large brokerage. The Charlotte, N.C.-based bank has its hands full with its acquisition of Countrywide FinancialCFC, slated to close in the third quarter. BofA also said this week that it is selling its prime brokerage business to BNP Paribas. "We're not interested in using our petty cash to buy any investment banks," Lewis said, according to the Journal. Merrill Lynch CEO John Thain, during a presentation Tuesday, noted that 30 years ago, there were many more investment banks than there are today. "The consolidation process doesn't have that much farther to go because there aren't a lot of entities left," he said. But even if a large bank like Merrill were to look at acquiring a smaller firm like Lehman, the combined entity could face "too much bureaucracy" and become "too big to manage," he added. Tim Ghriskey, the chief investment officer for Solaris Asset Management, says a sale of Lehman would ultimately depend on price. The company has some valuable assets, he says, such as its asset management firm, Neuberger Berman. In addition, "deals are being done," Ghriskey says. "Banks are lending. ... Credit is nervous here, but credit is available. It's not that it's unavailable." Solaris does not own shares of Lehman. "They seem to not be under as much stress as Bear Stearns was, but again it's so hard to tell unless you intimately know the books and nobody does," Ghriskey says. "We'd still say JPMorgan Chase can accelerate even more their capital markets exposures with an acquisition of Lehman, but it wouldn't be greeted very favorably by JPMorgan Chase investors."

Dow Ends Lower; Nasdaq Gains Ground Stocks in New York were mixed Monday afternoon as traders continued searching for direction following an uneven showing for the major averages last week. The Dow Jones Industrial Average was down 12 points at 12,296, and the S&P 500 was tacking on 2 points at 1362. The Nasdaq was better by 20 points at 2475. As the new week began, investors learned that Martin Sullivan is out as CEO of American International Group and will be replaced by AIG's chairman, Robert Willumstad. Stephen Bollenbach, an AIG director and a former CEO of Hilton Hotels, was named lead director. AIG was down 0.6%. The insurance giant's board had held a special meeting this weekend to consider Sullivan's fate. Meanwhile, Lehman Brothers, which last week ousted its chief financial officer and chief operating officer, posted a $2.8 billion second-quarter loss, matching its recent warning, owing to additional writedowns, new trading losses and bad hedges. Shares rose 5.9% to $27.34. The rest of the financial sector was also mostly climbing. Citigroup, JPMorgan Chase and Bank of America led the Dow's gainers, each adding at least 1.9%. Also in focus were three Dow components who received analyst downgrades. GE was cut to neutral from overweight at JPMorgan, while AT&T and Verizon were lowered to neutral from buy at UBS. On the positive side, Citigroup lifted its price targets on a series of agriculture stocks -- Agrium, Mosaic, Potash, CF Industries and Terra Industries. Elsewhere, the staff of the Federal Communications Commission has reportedly proposed that the agency finally grant clearance to the merger of XM Satellite Radio and Sirius Satellite Radio, which would bring to a close a long regulatory review of the deal. In the technology space, Intel announced it would spin off its solar energy business to form a new company called SpectraWatt, which will make photovoltaic cells for solar modules. Shares climbed 1.2% to $22.94. Federal Reserve Chairman Ben Bernanke also spoke about the rising cost of health care in the U.S., calling the health industry's performance one of the nation's biggest challenges. Humana, WellPoint, Aetna and United Health were all down slightly. On the commodities side, oil reached an all-time high just short of $140 a barrel, but lost steam and settled down 25 cents at $134.61 a barrel. A number of factors were moving oil around, including word that Saudi Arabia may boost production next month to about 9.7 million barrels a day. A fire at a StatoilHydro (STO - Cramer's Take - Stockpickr) drilling rig in the North Sea and weakness in the dollar lent support to oil's earlier rise. All the holdings of the Energy Select Sector SPDR were rising, with the exception of ExxonMobil. The Supreme Court rejected an Exxon appeal in a lawsuit related to alleged human-rights abuses by Indonesian soldiers under Exxon's employ. Exxon shares were down slightly to $88.05. Gasoline prices rose to a record $4.08 a gallon. Meanwhile, August gold futures finished up $13.20 to $886.30 an ounce. July corn futures climbed 2.5% to $7.50 a bushel as continued flooding in the Midwest damaged crops. The dollar was slightly stronger against the euro in late trading at $1.5476. The greenback dipped against the yen to 108.06. The Dollar Index, which measures the U.S. currency against a basket of major currencies, dropped 0.7% to 73.62. Treasury prices were little changed. The 10-year note was up 1/32, yielding 4.25%, and the 30-year bond was down 6/32, yielding 4.80%. As for the day's economic news, the New York Fed said its economic index for June fell to negative 8.7 from minus 3.2 in May, indicating a continuing contraction. Economists were looking for a reading of negative 2. The National Association of Home Builders announced that its Housing Market Index, which measures market sentiment, dropped to 18 from 19, matching a record low. Homebuilder stocks were experiencing mixed trading.

With shares of General Electric Cramer hitting a four-year low on Monday With shares of General Electric hitting a four-year low on Monday, the drumbeat on Wall Street for a drastic restructuring at the industrial conglomerate is getting louder. The stock was recently down 40 cents, or 1.4%, to $28.75. Earlier, it slipped as low as $28.46 after JPMorgan analyst C. Stephen Tusa Jr. cut GE to neutral from overweight, according to a research note to investors. "In an environment in which hitting numbers was religion, managers are paid to make the plan whatever way they can, and misses are not excused," Tusa said about the culture at GE. "This may create a situation that lends itself to putting off the bad news to see if something opens up, a risky way to operate with investors, especially in a more challenging environment." Those comments struck a chord with investors, who are still feeling burned by GE's unexpected drop in first-quarter profit that it blamed on weakness in its financial and real estate operations. After sounding a bullish note about the quarter in mid-March, the company reported earnings from continuing operations of 44 cents a share for the period, down 8% from last year and well below expectations for 51 cents. GE also lowered its 2009 earnings outlook in April from $2.42 to between $2.20 and $2.30 a share. The company is known as a dependable manager of earnings on Wall Street, giving more drama to the rare miss. Former CEO Jack Welch added fuel to the fire in an interview on CNBC shortly after the report where he made sharply critical comments about his successor, Jeff Immelt, that he later retracted. "Here's the screw-up," Welch initially said. "You made a promise that you'd deliver this, and you missed three weeks later." Asked about the possibility of more disappointments from GE in the future, Welch added, "I'd be shocked beyond belief, and I'd get a gun out and shoot him if he doesn't make what he promised now." All this comes after a growing chorus of GE shareholders have been calling for restructurings at the company for years. Since 2000, shares of GE have lost about a third of their value, and the stock has been essentially flat following the dot-com meltdown in the early years of this decade. Tusa is now predicting difficulties for GE's aviation unit, its real estate operations and its industrial segment. Also, he said problems will continue at GE's media subsidiary, NBC Universal, which has long been targeted for a sale on Wall Street. With its growth prospects in peril amid the rise of digital media and the aging of its core audience, NBC faces unprecedented uncertainty, especially after the sudden loss of Tim Russert, the company's larger-than-life Washington bureau chief and moderator of Meet The Press. Russert died of a heart attack last week at age 58. GE is currently selling parts of its consumer finance arm and its appliance business, but Tusa said it should go further and divest its NBC Universal media businesses and its health-care operation. He said a full restructuring would leave GE with its infrastructure business, which is currently benefiting from a global boom in infrastructure expansion, particularly in emerging markets such as China and India. "For investors to ever get comfort, there needs to be more transparency, which would be accomplished probably only through a dramatic portfolio restructuring," Tusa said.

Wachovia Faces Thin Pool for CEO Search Wachovia faces a shallow pool of candidates as it embarks on a search to replace ousted CEO Ken Thompson. A month after Thompson was stripped of the chairman title, Wachovia went one further and asked him to resign on Monday. Wachovia Chairman Lanty Smith, who was named interim CEO, will lead the search. No clear favorite is readily apparent. One possible Thompson successor, according to Robert Patten, a managing director and senior bank analyst at Morgan Keegan, includes Al de Molina, the former CFO of Bank of America. "He is the only name that has star quality," Patten says, referring to names that have been associated with Wachovia. But an investor who speaks daily to bank CEOs says de Molina is not a realistic option. "He's viewed as a joker in Charlotte, and he's from BofA -- the evil empire," the executive wrote in an email to TheStreet.com. The executive thinks Jerry Grundhofer, former chairman and CEO of US Bancorp is a possibility. Richard Bove, an analyst at Ladenburg Thalmann, told Bloomberg Television that Ben Jenkins, Wachovia's head of retail banking operations who was named interim chief operating officer Monday, might also make a logical candidate. The remaining candidates are retired banking CEOs or candidates who came up short in the Citigroup CEO derby, which was hardly viewed as a race of thoroughbreds. Of course, the Citi job was viewed as an extremely challenging one -- straightening out Wachovia is a comparative piece of cake: ride out the credit crisis and sell it to the highest bidder. Maybe JPMorgan Chase CEO Jamie Dimon will take a crack if the bank has digested Bear Stearns by then. Some observers believe John Kanas, former CEO and chairman of North Fork Bancorp, might be looking to get back in the game. Kanas sold his bank to Capital One FinancialCOF in late 2006. Fortune reported that Michael Neal, head of General Electric'sGE commercial finance uni